A mortgage rate lock allows you to keep your interest rate unchanged for a set period of time, usually between when your purchase offer is accepted and when you close on your new home. Locking in your rate can help you better plan for future mortgage costs, as rates can fluctuate – for better or worse – throughout the closing process.
It’s difficult to predict mortgage rate trends, and no speculator can tell you exactly which direction rates are headed over the next week or month. A rate lock can mitigate the risk that rates rise unexpectedly, but it can also leave you stuck with a higher rate if market conditions change. By asking the right questions, you can decide if or when a rate lock is the right move.